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2015 (11) TMI 1187 - AT - Service TaxRelevant date for payment of service tax where services are provided to Associate Enterprises - accrual basis or receipt basis - Scope of ection 67(4) - Business Auxiliary Service - Receipt of commission - Held that:- the explanation regarding transaction of taxable service with an associate enterprises only refers to value of taxable service which shall include any amount credited or debited in the Books of Account. But the date on which payment of Service Tax is due to be made is the 5th/6th of the month following the calendar month in which payments are received towards the value of taxable services in terms of Rule 6(1) as it stood during the relevant period (before 01.04.2011). There is no confusion on this. Appellant have clearly shown the dates on which the payments are received through the banking channels. There is no book adjustment outside the scope of the invoices raised to the Associate Enterprises. The lower authorities have completely mis-interpreted the provisions of the Rules and the Act. The amount has not been credited to the appellant's account. Simple recording of invoice amount as receivable in the Books of Account does not mean that there is a book adjustment in every case. If Revenue's view is taken as correct, the provision of law which states that Service Tax payment is linked to the receipt of payment of service, would render Rule 6(1) meaningless. The view of lower authorities does not stand to reason and must be rejected. I hold that the demand of interest does not sustain. - Decided in favour of assessee.
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